Why is the Indian rupee under pressure, and what role is the Iran war playing in this situation?

The Indian rupee is under persistent pressure due to oil-linked headwinds, having hit a lifetime low of 95.7950 per U.S. dollar; this strain is directly tied to elevated crude oil prices, which are being influenced by geopolitical uncertainty surrounding the 11-week-long Iran war — particularly as U.S. President Donald Trump’s visit to China focuses on seeking Chinese support to resolve the conflict and restore energy flows through the Strait of Hormuz.

What policy measures has India taken or is expected to take to counter the rupee’s depreciation and widening current account deficit?

India has raised import duties on gold to contain the trade deficit, which risks further expansion due to higher oil imports and a consequent widening of the current account deficit; additionally, Nomura expects more policy measures in the coming weeks and months, including steps to discourage non-essential imports (e.g., electronics), tighter rules under the Liberalised Remittance Scheme (which caps annual outward remittances at $250,000), and the potential issuance of a diaspora bond.

Rupee Stuck Under Oil Pressure; Iran War Shadows Trump’s China Trip

May 13, 2026

The Indian rupee hovers near record lows amid persistent oil-linked pressures and geopolitical tensions involving the US, China, and Iran. Traders anticipate impacts on energy flows and currency stability following President Trump's meeting with President Xi Jinping.

reuters

2026-01-05

US to Send Oil Companies to Fix Venezuela's Infrastructure, Boost Output: Trump

2026-02-23

Chemicals mostly spared under new Trump tariff plan

2026-03-10

Oil prices tumble after Trump says Iran war may be nearing end

2026-03-10

Markets Rally, Commodity Prices Fall as Trump Predicts Short Conflict

2026-03-10

Trump Signals Ceasefire, Global Oil Prices Plummet